We’re married: so what’s mine is yours and what’s yours is mine, right? Maybe — not always — and certainly not with all things. Individual retirement accounts quickly come to mind; jewelry is another. And I’m willing to bet that most married people draw the line at their cars as well. Each of us, even in a marriage, has to have at least a few things that are just ours and nobody else’s. Just about everything else — the house, the mortgage, the credit cards, the furniture and, yes, the kids — fit easily and comfortably into the “ours” category.

But there are a few things that sit in the gray zone in between “mine” and “ours.” Perhaps the most important of those things is the checking account. Will it be joint (“ours”) or separate (“mine”)? There are advantages to going either way, and which path a couple chooses may be influenced by circumstances and abilities more than anything else.

The Joint Checking Advantage

Unified money management. A joint account puts the couple into a single money management system, at least as far as spending is concerned. It may be easier to reach long-term financial goals under a single system than if each partner uses their own.

Puts the stronger financial manager in charge. Use of a joint checking account is the most effective way of allowing the stronger money manager to direct the flow of household finances. The weaker partner will have less direct control so the negative influence will be minimized.

Eliminates secrets. Separate accounts have the potential to enable each spouse to hide certain spending habits. They can also cause each spouse to pull in a different direction, virtually sabotaging efforts to move forward as a couple. A joint account makes hidden spending far less likely.

Lower bank fees. A single checking account means half as many bank fees as you’ll have with two separate accounts. And this is no small matter anymore—bank fees have been skyrocketing in recent years.

The Separate Checking Accounts Advantage

Shoring up the shortfall. If one spouse is short in one month, the other can cover, either by transferring cash or by picking up a bill or two. A few months later the other spouse is short, and the money flows the other way. It’s a form of checking account diversification.

Increased spending flexibility. Let’s face it, if one spouse is managing the checkbook, the other might feel as if he or she is on an allowance! That may not be what’s happening, but it can seem that way. The partner who isn’t handling the checkbook may be relegated to asking for money, or at least asking for permission to access it. With separate accounts, each spouse has a sense of financial control.

Avoids overdrafts. Two people writing checks out of one account can be bad enough, but two people also having debit cards tied to the same account is a recipe for pure financial chaos. The potential for overdraft fees is staggering. In fact debit cards may be the single most compelling argument for separate accounts.

Minimizes the impact of identity theft. Identity theft is a fact of life. If a couple has a joint account and it is somehow compromised, they have a BIG problem. But if they use separate accounts, and one spouse’s identity is stolen, the couple can switch immediately over to the unaffected spouses checking for day to day transactions.

Which Do You Choose?

There are factors which might influence a couple to choose joint or separate checking accounts that have less to do with personal preference, and more about circumstances.

Single or dual income. Generally speaking, joint checking will work better if the couple rely on a single income. Paychecks are deposited in one account and all expenses are paid out of it—simple. But when both spouses have an income, separate accounts may become necessary especially if each partner has expenses related to the production of that income (commuting, parking, lunches, business expenses, etc.).

One partner is bad at managing finances. Some people are not very good at managing money, and giving them control of a checking account is just tempting fate. If one spouse fits that description, a joint account managed by the stronger financial partner is the way to go.

One partner has no interest in managing finances. Some people enjoy managing money, others are repulsed by it. There are even people who are very good at earning money but have no interest in managing it—they wouldn’t be offended by being put on an allowance, even if you decided to call it that. Again, a joint account managed by the partner with the higher money interest will be the better route.

In a very real way, managing the checkbook is the single most important component of money management. The checking account is usually where the money comes in, and is almost always where it goes out for both expenses and savings. Who manages this function—whether it’s done individually or jointly—may have a greater impact on a couple’s finances than any other effort they make.

Which way works best for you and your spouse—joint or separate checking?

Photo:Heidi Elliott, Creative Commons 2.0
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Kevin Mercadante is the proprietor of OutOfYourRut.com, a website focusing on careers, business ideas, money and more. He’s worked for many years in the mortgage business, as both an underwriter and a loan officer. Opinions by guest bloggers do not necessarily reflect that of LendingTree/Tree.com.